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HR Compliance Updates – September 2022

By September 16, 2022September 19th, 2022No Comments

🗓️  September Updates

Keeping HR pros up to date with important compliance updates and human resource articles.

Michigan Drops Quarantine Guidance

The state of Michigan no longer recommends that individuals quarantine for five days if they have been exposed to COVID-19. Rather, Michigan recommends that individuals monitor their symptoms and mask around others for 10 days after exposure. This guidance now aligns with that of the CDC, which dropped its own quarantine recommendation in mid-August.

Consistent with the CDC, Michigan still recommends that individuals isolate for at least five days if they test positive for COVID-19.

ACA Pay or Play Penalties Will Increase for 2023

On August 16, 2022, the IRS updated its FAQs on the employer shared responsibility (pay or play) rules under the Affordable Care Act (ACA) to include updated penalty amounts for 2023. For calendar year 2023, the adjusted $2,000 penalty amount is $2,880 and the adjusted $3,000 penalty is $4,320.

Under the pay or play rules, an applicable large employer is only liable for a penalty if at least one full-time employee receives a subsidy for Exchange coverage. Employees who are offered affordable, minimum value coverage are generally not eligible for these Exchange subsidies. Depending on the circumstances, one of two penalties may apply under the pay or play rules – the 4980H(a) or the 4980H(b) penalty.

Inflation Reduction Act Contains Health Reforms

On August 16, 2022, President Biden signed the Inflation Reduction Act into law. While this law is primarily aimed at fighting inflation and reducing carbon emissions, it also contains a number of reforms that will impact health coverage. These reforms have staggered effective dates and will be implemented over the next several years.

The health reforms primarily impact those with Medicare coverage. Specifically, the law implements the following measures:

  • It allows the DHHS to negotiate the prices of some Medicare drugs, effective in 2026 for 10 drugs covered by Medicare, increasing to 20 drugs in 2029.
  • Beginning in 2023, the cost of insulin will be capped at $35 per month for diabetics enrolled in Medicare.
  • Beginning in 2025, out-of-pocket prescription drug costs will be capped at $2,000 per year for Medicare beneficiaries.
  • The law also implements a three-year extension on increased health insurance subsidies for coverage purchased through an Exchange. These enhanced subsidies were originally provided as part of the American Rescue Plan Act and were set to expire at the end of 2022.

SAR Is Due by Sept. 30 for Calendar Year Plans

Many employers that must File Form 5500 on behalf of their employee benefit plans must also provide plan participants with a summary annual report (SAR). The SAR is a summary of the information included in Form 5500.

Employers with plans that operate on a calendar year basis must provide the SAR by Sept. 30, 2022. However, if the employer received an extension of time to file its Form 5500, the deadline for providing the SAR is Dec. 15, 2022. The SAR requirements only apply to plans that must file Form 5500. Also, self-insured welfare plans, regardless of size, are not required to provide a SAR if they are unfunded. The DOL has a sample SAR that employers may use for their welfare plans.

Final Rule Implements Ban on Surprise Medical Billing

On August 19, 2022, the DOL, HHS and Treasury jointly released a final rule implementing the ban on surprise medical billing under the No Surprises Act, which was enacted as part of the Consolidated Appropriations Act. This rule finalizes two interim final rules released in 2021, with certain changes related to the independent dispute resolution process that has been subject of ongoing litigation.

The final rule is generally intended to make certain medical claims payment processes more transparent and clarify the process for providers and health insurers to resolve their disputes.

  • Implements certain disclosure requirements related to information that group health plans and health insurance issuers The Consumer Coverage Disclosure Act (CCDA), signed into law on August 27, 2021, and effective immediately, imposes new disclosure requirements on employers who provide group health insurance coverage to employees in Illinois.
  • Finalizes certain changes related to the federal IDR process in light of ongoing litigation.
  • Requires plans and issuers to disclose additional information in situations where they change a provider’s billing code to one of a lesser value.

FAQs Address Posting Issue For Files

As noted above in mid-August, the DOL, HHS & Treasury issued updated FAQs addressing the No Surprises Act and the Transparency in Coverage Rules. Employers have been asking whether they are required to post a link to their machine-readable files on their public websites.

The Transparency in Coverage Final Rules (the TiC Final Rules) require non-grandfathered plans and issuers offering non-grandfathered coverage in the group and individual markets to disclose, on a public website, information regarding in-network rates for covered items and services, out-of-network allowed amounts and billed charges for covered items and services and negotiated rates and historical net prices for covered prescription drugs in separate machine-readable files.

The machine-readable file requirements of the TiC Final Rules are applicable for plan years (in the individual market, policy years) beginning on or after January 1, 2022. The Departments previously announced that they will defer enforcement of the requirements related to machine readable files disclosing in-network and out-of-network data until July 1, 2022. The Departments also previously announced that they will defer enforcement of the requirement that plans, and issuers publish a machine-readable file related to prescription drugs while the Departments consider, through notice-and-comment rulemaking, whether this requirement remains appropriate.

Additionally, the TiC Final Rules require plans and issuers to make price comparison information available to participants, beneficiaries, and enrollees through an internet-based self-service tool and in paper form, upon request. This information must be available for plan years (in the individual market, policy years) beginning on or after January 1, 2023, with respect to the 500 items and services identified by the Departments in Table 1 in the preamble to the TiC Final Rules, and with respect to all covered items and services, for plan or policy years beginning on or after January 1, 2024.

Family Medical Leave Act (FMLA) Employer Checklist

For HR professionals, administering FMLA in our workplaces can be cumbersome and confusing. There are many forms and deadlines for which we need to remember. Therefore, we developed an FMLA checklist that outlines key steps for employers to comply with the FMLA. Keep in mind that complying with the FMLA may involve additional steps depending on the facts of a specific situation. Also, many states (and some localities) have their own family and medical leave laws that provide broader leave protections to employees. Employers will need to comply with the FMLA and any applicable state and local leave laws.

Live Well, Work Well Newsletter – September 2022

A free wellness resource to download and share in your workplace.

This month’s newsletter topics include:

  • The Art of Mindful Eating

  • Are You Prepared for a Disaster

  • Identifying Phone Scams

Carrie A. Nicholson, PHR, SHRM-CP

HR/Benefits Compliance & Sales Advisor

Our Employee Benefits team is here if you have any questions or would like us to help you with your group benefits. Contact Us

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